Sebi greenlights NSDL IPO: NSE, HDFC Bank among others to pare stakes

NSDL IPO: Market regulator, the Securities and Exchange Board of India (Sebi), has given the green light to National Securities Depository's (NSDL) highly anticipated initial public offering (IPO). This move paves the way for prominent investors, including the National Stock Exchange of India (NSE), State Bank of India (SBI), and HDFC Bank, to divest their stakes in NSDL, as outlined in the Draft Red Herring Prospectus (DRHP).

NSDL's listing will also mark India's second publicly traded depository, alongside Central Depository Services (CDSL), which listed on NSE in 2017. Both NSDL and CDSL are India's sole SEBI-registered depositories offering demat and settlement services.

 

The Sebi nod for the NSDL IPO came more than a year after the company submitted its DRHP to Sebi on July 7, 2023. As investors await further details about the NSDL IPO, here are the key details outlined in the DRHP

NSDL IPO issue size

The public issue of NSDL comprises an offer for sale of 57,260,001 shares with a face value of Rs 2 apiece. Among the investors offloading stakes, NSE plans to sell 18,000,001 shares, IDBI Bank 22,220,000 shares, Union Bank of India 5,625,000 shares, State Bank of India 4,000,000 shares, and HDFC Bank 4,000,000 shares.

Additionally, the Administrator of the Specified Undertaking of the Unit Trust of India plans to sell up to 3,415,000 shares of NSDL via the offer for sale route.

NSDL IPO objective

In the DRHP, NSDL stated that it will not receive any proceeds from the offer, and all such proceeds (net of any offer-related expenses borne by the selling shareholders) will go to the selling shareholders, in proportion to the shares sold by them as part of the offer.

The equity shares offered through the Red Herring Prospectus are proposed to be listed on BSE.

NSDL financial details

According to the DRHP, NSDL's revenue from operations for FY23 stood at Rs 1,021.98 crore, compared to Rs 761.10 crore in FY22 and Rs 467.56 crore in FY21. Total expenses for FY23 were reported at Rs 789.93 crore, Rs 541.68 crore in FY22, and Rs 279.54 crore in FY21.

The company’s total comprehensive income for FY23 rose to Rs 237.11 crore from Rs 212.32 crore in FY22, and Rs 188.55 crore in FY21.

NSDL IPO price band, lot size and other details

As per the DRHP, NSDL will determine the price band and offer price in consultation with the Book Running Lead Managers (BRLMs), based on the market demand for the equity shares offered through the Book Building Process and on qualitative and quantitative factors.

Link Intime India is the registrar of the NSDL IPO. ICICI Securities, Axis Capital, HSBC Securities and Capital Markets (India), IDBI Capital Markets & Securities, Motilal Oswal Investment, and SBI Capital Markets are the book running lead managers for the public issue.

About National Securities Depository (NSDL)

NSDL is a SEBI-registered market infrastructure institution that pioneered the dematerialization of securities in India in November 1996. As of March 31, 2023, NSDL is the largest depository in India in terms of the number of issuers, number of active instruments, market share in demat value, settlement volume, and value of assets held under custody (Source: CRISIL Report). Through its subsidiaries, NDML and NPBL, NSDL offers a range of IT-enabled solutions across multiple verticals such as e-governance, payment solutions, collaborative industry solutions, regulatory platforms, KYC solutions, insurance repository services, and digital banking solutions.